BUZZ Investing: Geopolitical Shocks Trigger Broad Market Retreat

Market movements discussed below reflect a range of factors, and specific drivers are based on market observations and may not fully explain performance. Past performance is no guarantee of future results. Other investments may have performed differently during the same period.

Key takeaways

• U.S. equities shifted from an orderly sector rotation, dubbed the "immaculate rotation," into a broad risk-off sell-off as geopolitical shocks from U.S.-Israel strikes on Iran and a worse-than-expected jobs report reignited stagflation fears.
• Netflix and Nebius led BUZZ Index gains on disciplined capital allocation and AI infrastructure validation, while Applied Digital and SoFi weighed on performance amid neocloud financing concerns and high-beta positioning unwinds.
• Defense contractor RTX and fintech disruptor Block entered the BUZZ Index in March, reflecting surging sentiment around military spending following the Iran conflict and investor enthusiasm for Block’s aggressive AI-driven workforce restructuring.

U.S. equity markets transitioned from a tactical rotation to a broader, more defensive retrenchment during the recent period between selection dates (February 11, 2026 – March 12, 2026, the “Period”). During the latter half of February, the "SaaS-pocalypse" narrative intensified, as investors aggressively de-rated enterprise software leaders like Salesforce, Atlassian, and Workday over fears that autonomous AI agents would disrupt traditional per-seat licensing models. Leadership rotated toward financials, industrials, healthcare, and select cyclical segments as last year’s dominant mega-cap names lagged. Some coined this dynamic an “immaculate rotation,” reflecting the market’s ability to reallocate capital away from crowded leadership without materially disrupting index-level stability. However, this relative index-level stability proved fleeting as the Period progressed, with the S&P 500 and Nasdaq Composite ultimately declining, erasing earlier year-to-date gains. Against this backdrop, the BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) exhibited relative resilience, declining 1.4% compared with declines of 3.7% and 3.2% in the S&P 500 and Nasdaq Composite, respectively.

The market’s tone shifted in early March, as a confluence of macro shocks triggered a shift from sector-specific dispersion to broad-based liquidation. The February 28 coordinated military strikes by the U.S. and Israel on Iranian targets introduced a sudden wave of geopolitical instability, resulting in a surge in Brent crude prices amid shipping disruptions in the Strait of Hormuz. This inflationary shock was compounded by the March 6 Department of Labor report, which revealed a larger than expected contraction of 92,000 jobs and a rise in the unemployment rate to 4.4%, the highest in nearly two years. These dual shocks effectively collapsed the "soft landing" narrative, replacing it with fears of stagflation and a potential "policy trap" for the Federal Reserve. As risk-off sentiment took hold, safe-haven assets like gold and silver reached new highs while speculative appetite vanished, leaving equities to digest a high-correlation sell-off as the Period concluded near its session lows.

The BUZZ Index returned -7.03% during the month of February compared to a return of -0.76% for the S&P 500 Index during the same period. Year-to-date, the BUZZ Index lags the S&P 500 with returns of -5.32% and 0.68%, respectively, as of the end of February.

Netflix and Nebius Lead BUZZ Gains on Strategic Developments

Shares of Netflix, Inc. (NASDAQ: NFLX) were among the leading contributors to BUZZ Index performance during the Period. The stock advanced following the company’s decision to withdraw from its proposed acquisition of Warner Bros. Discovery, allowing Paramount Skydance to pursue the transaction while collecting a $2.8 billion breakup fee. Investors appeared to view the outcome favorably, as it removed the need for Netflix to assume significant incremental debt and regulatory uncertainty associated with a complex media merger. The move also reinforced management’s longstanding preference for organic growth and disciplined capital allocation. With the potential distraction of a large-scale acquisition removed, market attention returned to Netflix’s core strengths, including its global content production engine and established track record of generating high engagement across its platform.

Nebius Group N.V. (NASDAQ: NBIS) was another notable contributor, rising following the announcement of a strategic partnership with Nvidia that includes a planned $2 billion investment to support the deployment of artificial intelligence infrastructure. The agreement is expected to enable Nebius to expand its AI cloud capabilities and deploy large-scale Nvidia systems as demand for accelerated computing continues to grow. Nebius has positioned itself as an emerging provider of AI-focused cloud capacity, and the endorsement from Nvidia was interpreted by investors as a meaningful validation of the company’s technology and growth strategy. Shares responded positively to the announcement, reflecting broader investor interest in companies building the infrastructure required to support the expanding AI ecosystem.

Top BUZZ Index Contributors: February 11, 2026 – March 12, 2026

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

AI Infrastructure and Fintech Weakness Weigh on BUZZ Performance

Applied Digital Corp. (NASDAQ: APLD) was among the largest detractors from BUZZ Index performance during the Period, as investor sentiment toward AI infrastructure operators softened. Shares declined amid broader volatility across the emerging “neocloud” segment following reports that financing challenges had surfaced around a large data-center development associated with CoreWeave. While the situation did not directly involve Applied Digital, the news appeared to raise broader questions about the availability and cost of capital required to fund large-scale GPU clusters and next-generation data centers. Additional pressure followed disclosures that Nvidia had exited its equity stake in the company during the fourth quarter, a move that some investors interpreted cautiously despite Nvidia’s history of actively rotating its investment portfolio. Taken together, the developments highlighted the sensitivity of capital-intensive AI infrastructure businesses to changes in credit conditions and investor expectations around funding timelines.

SoFi Technologies, Inc. (NASDAQ: SOFI) was another notable detractor during the Period as shares continued a difficult start to the year. The stock had declined meaningfully year-to-date, with weakness appearing to reflect a combination of valuation sensitivity, high beta exposure, and a moderation in retail-driven momentum that had previously supported the shares. Some analysts suggested that positioning rather than fundamental deterioration may have been a key factor, as the broader digital banking segment also experienced pressure. During the Period, CEO Anthony Noto purchased approximately $1 million of stock in the open market, a move that historically has been interpreted by some investors as a signal of confidence in the company’s longer-term outlook, even as the shares faced near-term volatility.

Bottom BUZZ Index Contributors: February 11, 2026 – March 12, 2026

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

BUZZ Index March 2026 Rebalance Highlights

RTX Corporation

After weeks of escalating rhetoric and military positioning, the United States announced on March 1 that it had carried out missile strikes targeting Iran’s leadership. The operation reportedly targeted senior Iranian leadership, according to media reports, and was intended to destabilize the current regime and halt Iran’s nuclear weapons ambitions. While the initial reaction in equity markets was relatively muted, sector-level impacts soon began to emerge. Oil prices moved sharply higher after the Strait of Hormuz, which runs along Iran’s southern coast and handles nearly 20% of global daily oil traffic, was effectively shut down. The U.S. defense sector also rallied, as military conflicts historically tend to increase demand for defense spending. RTX Corp (NYSE: RTX), one of the largest U.S. defense contractors, saw a notable surge in investor sentiment following the onset of the strikes. Sentiment continued to climb as the month progressed after it became increasingly clear that the conflict was unlikely to quickly resolve. This month, RTX enters the BUZZ with a 1.22% weight.

Block, Inc.

On February 26, Block, Inc. (NYSE: XYZ), led by former Twitter founder Jack Dorsey, reported earnings alongside a sweeping restructuring announcement. The company revealed plans to lay off roughly 4,000 employees, approximately 40% of its workforce, and transition many of those functions to AI-driven teams. While investors have long expected artificial intelligence to gradually replace certain human tasks, the speed and scale of Block’s move was a shock for many. Management framed the restructuring as a major efficiency initiative aimed at lowering costs and streamline operations through automation. The market’s reaction was overwhelmingly positive, with shares jumping 20% the following day. Investor sentiment also surged, as many retail investors pointed to the move as a clear example of real-world AI adoption beginning to reshape companies. XYZ joins the BUZZ Index in March with a 0.69% weight.

For more on rebalancing results and a full breakdown of index constituents added and removed for the month, view the BUZZ Index reconstitution report.

Definitions: The S&P 500 is a stock market index of 500 of the largest companies listed on stock exchanges in the United States. The Nasdaq Composite Index is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange. S&P Banks Select Industry Index comprises stocks in the S&P Total Market Index that are classified in the GICS asset management & custody banks, diversified banks, regional banks, other diversified financial services and thrifts & mortgage finance sub-industries. Markit CDX North America High Yield Index represents one hundred liquid North American entities with high yield credit ratings as published by Markit. CBOE VIX Index is a real-time market index representing the market’s expectations for volatility over the coming 30 days.